ARK-LA-TEX REGIONAL STUDY

Energy Advisors Group has released its April 12, 2024 review of the Haynesville and Middle Bossier area play in North Louisiana and East Texas as a continuation of our Market Monitor Series. The Special Report also highlights the industry's movement west into Leon and Robertson Counties that is scoring good wells in these same formations. The report also highlights new activity in the San Augustine Trough including a new well from Exxon that topped 61 Mmcfed. As with all our reports, this 47-page Special Report provides unique perspectives on M&A, E&P, and Capital Markets activity in the play.

Quick Quotes:

--- "Has there ever been a disconnect on where natural gas prices are and where they are supposed to be?

--- "Analysts say we have to grow Haynesville 60% to feed LNG but how do you do that in a sub $2.00 gas market."

--- "The Haynesville area produces ~15 Bcfd or ~15% of all U.S. natural gas. As opposed to eight or more benches in the Permian, just 2 formations account for these eye-popping volumes – the Haynesville and Bossier plays."

--- “The merger of Chesapeake and Southwestern creates a U.S. natural gas independent that can compete on a global scale and, by the way, produces 37% of Haynesville gas.”

--- "Moving West, Comstock & Aethon have drilled west of 'Haynesville Area Proper' in Leon & Robertson Counties with deep hot wells (Haynesville & Bossier) and tests are running ~31 to 43 MMcfpd."

Observations & Takeaways---

Here are our observations in M&A, capital markets, E&P and operations:

A&D - Chesapeake + Southwestern is a Perfect Haynesville Union

• Chesapeake’s merger with Southwestern creates a U.S. natural gas powerhouse – accounting for ~37% of Haynesville production and 13% of Appalachia gas, Closing pushed to 2H24 due to FTC delays;
• Tokyo Gas purchased Quantum-backed Rockcliff last December for $2.7 billion and quadrupled its production by adding 970 MMcfpd net (1.3 Bcfpd gross);
• Haynesville A&D activity has totaled >$21 billion since 2013 in 49 transactions (>$10 million);
• Currently, Tellurian is looking to exit its upstream Haynesville assets and possibly sell the entire company;
• Chevron is officially “evaluating strategic opportunities” for its 72,000 net acres in Panola County that includes not only lightly developed Haynesville but also legacy Cotton Valley at Carthage; 
• Looking forward, Haynesville is attractive to international players committed to Gulf Coast LNG offtake.

E&P - Haynesville Continues to Deliver and Operators Drilling Sweet Spot West of Boundary

• The Top 3 (CHK+SWN, Aethon, Comstock) produce ~56% of the Basin’s gross op volumes; 
• Same operators are running 21 rigs (62%) and have filed 134 (43%) permits in the last six months;
• There are 2,260 new wells in the Haynesville since 2018 & 350 in the Middle Bossier which are the most prolific;
• The Top 25 new wells since January 1, 2023 have average peak IP30’s over 38,750 Mcfd;
• In total, >510 wells were brought online in 2023 with an average peak IP30 of 19,085 Mcfd;
• Comstock & Aethon are drilling good deep hot wells westward outside the Haynesville core clustered around the Leon/Robertson county line; These wells are peaking in the 3.4 - 4.5 MMcf/d per 1,000’ lateral.
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Capital Markets - Comstock is the Only Public Haynesville Pure Play... for now

• Comstock Resources is the largest public pure-play Haynesville company and its stock is down 46% in the last 2 years compared to up 27% for the S&P 500 and up 18% for the S&P Oil & Gas Index (“XOP”); Jerry Jones just invested another $100 million into the company;
• Aethon is the second largest Haynesville operator and is backed by Ontario Teachers Pension Fund and Redbird Capital. Once gas hits, will Aethon could go public through an IPO or seek Jerry?
• The Haynesville has 289 operators (72 with HZ production) incl numerous small private independents who could be targets thru rollups & consolidation;
• Dallas Fed Energy Survey on March 13 -21, 2024 shows $2.64 gas in a year (median from 135 participants).

Here is our quick M&A insight

Here is our E&P take:

Here's a look at Black Stone's lands being actively managed in the Shelby Trough:

Comstock is the industry's only pure play in the Haynesville and its stock has been hurt over the last year:

In closing---

Energy Advisors is working hard to expand our thought leadership and look forward to providing additional market insight for our clients through regional perspectives, M&A analysis and market monitor. 

Our firm has been serving the needs of buyers, sellers and capital providers for over thirty-five years.

TO LEARN MORE:

Energy Advisors Group

Brian Lidsky

Director of Research

Phone: 713-600-0138

---Email: blidsky@energyadvisors.com

Ronyld W Wise

Founder & Managing Director

Cell Phone 713-594-0812

--- Email: rwise@energyadvisors.com

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4265 San Felipe Ste 650

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